A TWO-YEAR investigation into Newcastle United owner Mike Ashley’s sportswear chain and its smaller rival JJB is set to be dropped.
The Office of Fair Trading launched a probe two years ago into whether Sports Direct and JJB Sports had worked together to control competition in the sports retail sector.
And yesterday the competition watchdog told the two companies that it had provisionally decided to close its inquiry.
The investigation first came to light in September 2009 after JJB Sports approached the OFT about a “suspected agreement or concerted practice to dampen competition in the sports retail market”.
In October last year, the Serious Fraud Office announced that no charges were to be brought against the companies.
Between them, Sports Direct and JJB have leading positions in the market for replica football shirts and sportswear.
The OFT inquiry centred on allegations of anti-competitive conduct between June 8, 2007 and March 25, 2009. It gave no reasons for the decision and said that it expects to make its final announcement on whether to close the investigation later this year.
Both companies released statements repeating the OFT’s decision not to pursue the matter.
Sports Direct chairman Keith Hellawell said: “We welcome the announcement by the OFT. It is in line with Sports Direct’s long-held views on the investigation. It is also consistent with previous decisions taken by other regulatory bodies.”
And JJB Sports issued a statement which confirmed the situation and said it was “not in a position to comment on the reasons behind the OFT’s provisional decision.”
Meanwhile, Sports Direct has confirmed that it is to pay £86.8m to buy a portfolio of properties from chief executive Mr Ashley despite the company’s independent directors valuing the assets at between £75m and £80m. The agreed price is understood to be 60% higher than the most recent vacant possession valuation by estate agents CBRE. Sports Direct said in a statement that rents on the properties could rise by 50% when the leases come up for renewal in March.
